Page:Sid & Marty Krofft Television Productions v. McDonald's Corporation.pdf/17

Rh 1349, 1357 (E.D.N.Y.1975); 2 Nimmer §§ 150–51 at 666–69. In order to accurately determine profits, a defendant may be required to make an accounting. 2 Nimmer § 153.2 at 674.

The jury assessed damages of $50,000 against defendants in this case. Subsequent to the return of the verdict, counsel for both sides, at the district court’s request, briefed the question of whether plaintiffs were entitled to additional monetary recovery either in the form of profits or statutory “in lieu” damages. After considering this question, the district court concluded that plaintiffs were not entitled to any additional recovery and denied plaintiffs’ motion for an accounting of profits by defendants.

The issues on appeal are threefold: (1) whether the jury considered profits in assessing damages; (2) if not, whether plaintiffs are entitled to recovery of damages and profits or merely damages or profits; and (3) whether, if profits cannot accurately be determined, plaintiffs are entitled to statutory “in lieu” damages.

Two weeks before trial, the district court signed the Pre-Trial Conference Order that was prepared and “approved as to form and content” by counsel for both sides. It provided: "“All factual questions of liability and damages are for the jury. The prayer for relief raises issues of injunctive relief and an accounting which are questions for the court.”"

Rule 16 of the Federal Rules of Civil Procedure expressly provides that a Pre-Trial Conference Order “when entered controls the subsequent course of the action, unless modified at the trial to prevent manifest injustice.” There was no modification of this Order at trial or at any other time. Rule 39(a) of the Federal Rules further provides that issues will not be given to the jury when reserved for the court by “written stipulation filed with the court.”

Defendants argue that plaintiffs’ original demand for a jury trial meant that all issues had to go to the jury. See Fed.R.Civ.P. 38(c). But the clear language of the Pre-Trial Conference Order and the subsequent conduct of the parties contradict any claimed general demand for a jury trial. We conclude that the parties intended to withhold the issue of profits from the jury.

This conclusion is supported by the instructions given to the jury. Jury Instruction No. 26 was accepted by the court and read to the jury as follows: "“(i) Under a claim of copyright infringement a plaintiff, after, and only after, having first established the necessary elements thereof (about which I have previously charged) by a preponderance of the credible evidence, is entitled to recover only such actual damages as he has proven to be attributable to the infringing use of his material, that is to say, they may recover only that sum of money which they have proven to be their actual pecuniary loss.

“(ii) The profits of defendants are not to be considered by you in determining plaintiffs’ money damages claim hereunder” (emphasis added)."

The record also shows that inquiry from the court elicited agreement with this instruction from counsel for both sides.